Correlation Between Apple and Thornburg International

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Can any of the company-specific risk be diversified away by investing in both Apple and Thornburg International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Apple and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Thornburg International Growth, you can compare the effects of market volatilities on Apple and Thornburg International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Apple with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Thornburg International.

Diversification Opportunities for Apple and Thornburg International

-0.82
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Apple and Thornburg is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and THORNBURG INTERNATIONAL GROWTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Apple is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Apple Inc are associated (or correlated) with Thornburg International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg International has no effect on the direction of Apple i.e., Apple and Thornburg International go up and down completely randomly.

Pair Corralation between Apple and Thornburg International

Given the investment horizon of 90 days Apple Inc is expected to under-perform the Thornburg International. In addition to that, Apple is 2.0 times more volatile than Thornburg International Growth. It trades about -0.15 of its total potential returns per unit of risk. Thornburg International Growth is currently generating about 0.13 per unit of volatility. If you would invest  2,533  in Thornburg International Growth on December 29, 2023 and sell it today you would earn a total of  54.00  from holding Thornburg International Growth or generate 2.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  THORNBURG INTERNATIONAL GROWTH

 Performance 
       Timeline  
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Thornburg International 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg International Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Thornburg International may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Apple and Thornburg International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Thornburg International

The main advantage of trading using opposite Apple and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Thornburg International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thornburg International will offset losses from the drop in Thornburg International's long position.
The idea behind Apple Inc and Thornburg International Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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